February 25, 2009
During testimony before a House comittee today, I heard Fed Chairman Bernanke recommend the reinstatement of the uptick rule. I COMPLETELY agree with him.
If you want to instill confidence in the market for us individual investors in the stock market, it is the single most important thing you could do.
Consider this. My 401k money can only go into a long stock position. There are MILLIONS of other small investors who like me can only do the same. Yet your present rules allow someone, anyone, a hedge fund, another country's private equity fund, to come in and short-sell that stock into the ground. We are defenseless, sitting ducks for their weapons.
Why should we subject our life savings to this? Why do you allow the willful destruction of VALUE in equities? If someone came and did that to a tangible property that I owned a part of, they would be arrested and thrown in jail for it.
I think a short sale should only be allowed as a "short limit" sale, above the last trade. No market short sales allowed. Actual owners of the stock MUST be given protection and preference in the market.
And institutions should be required to declare their short positions on a regular basis, just like they are required to register their long holdings.
If you care about our country, you will take away the advantage that has been given to the short sellers and put limits on short selling. And while you're at it, get rid of those 2X and 3X ETF's that completely dominate many small- and mid-cap stocks.
Thank you.